Slide 1: Preliminary Results 2023
PRELIMINARY RESULTS 2023. Full Year Results Presentation | 5 March 2024
Slide 2: Disclaimer
Disclaimer. This presentation has been prepared by Reach plc (the “Company”) Forward-looking statements speak only as of the date of such statements and its subsidiaries or associated companies or its or their affiliates reflecting the knowledge and information available and, except as (the “Group”)
Slide 3: Jim Mullen, Chief Executive Officer
Jim Mullen Chief Executive Officer Preliminary results | Jim Mullen FY Results | 5 March 2024
Slide 4: Summary: A path to progress
Financial Strategic Summary review update A path to progress. RESILIENT FINANCIAL RESOLVED LONG-TERM PRIORITIES PERFORMANCE UNCERTAINTIES ● Customer Value Strategy (CVS) driving Historical Legal Issues: ● Focus on continued delivery higher quality revenues represent 43% digital Customer Value Strate
Slide 5: Darren Fisher, Chief Financial Officer
Darren Fisher Chief Financial Officer Preliminary results | Darren Fisher FY Results | 5 March 2024
Slide 6: Financial review - resilient financial performance
Summary Financial Strategic review update Summary - resilient financial performance. Revenue Adj. operating Operating Adj. operating Adj. EPS per Profit margin cash flow share £569m Revenue £97m 17.0% £91.9m 21.8p . £601m 2022: 2022: £106m 2022: 17.6% 2022: £92.1m 2022: 27.1p Preliminary results | F
Slide 7: FY23 Financial summary
Summary Financial Strategic review update FY23 Financial summary. • Print circulation resilient Adjusted Results FY23 £m FY22 £m Var £m Var % Print 438.8 448.6 (9.8) (2.2) • Decline in referral traffic Digital 127.4 149.8 (22.4) (15.0) impacting digital. Data driven revenues resilient Other 2.4 3.0
Slide 8: Revenue
Summary Financial Strategic review update Revenue. Print resilient, data driving careful decisions 1.6% (11.9)% (8.0)% (15.0)% (16.9)% (5.4)% Preliminary results | Financial review £xm £601m Total print down 2.2% or £569m £9.8m £xm FY22 Circulation Print Printing & Digital Other FY23 advertising pri
Slide 9: Print revenue
Summary Financial Strategic review update Print revenue. Circulation revenue robust and reliable. £449m £439m £31m • Overall print volumes declined 17% £23m £29m £23m £20m • Circulation revenues supported by £87m £77m data to determine price increases and levels of availability Preliminary results |
Slide 10: Digital revenue
Summary Financial Strategic review update Digital revenue. Data-driven revenue makes up 43% of digital revenue (4.0)% (22.0)% (11.9)% £150m • Data-driven £127m £23mrevenue supported by improving yield which compensates volume decline £58m £55m • Strong growth over the year Preliminary results | Fina
Slide 11: Challenging market impacting digital performance
Summary Financial Strategic review update Challenging market impacting digital performance. Customer value strategy driving value CHALLENGING AD MARKET FOCUS CUSTOMER VALUE STRATEGY Sector-wide decline in Using data to add value to advertisers digital referral volumes and audience creates resilience
Slide 12: Decisive action on operating costs
Summary Financial Strategic review update Decisive action on operating costs. Adapted quickly to changing environment £498m • Operating costs 4.6% lower, on £475m LFL 52 week 5.7% lower • Labour £23m costs represent half of £235m operating costs and have £223m declined 5% from the cost restructuring
Slide 13: Profit bridge
Summary Financial Strategic review update Profit bridge. £(33)m £30m £1m £(9)m £6m £(13)m Preliminary results | Financial review £xm £106m £97m £xm Net cost saving of £23m FY22 Revenue Inflation Investment Efficiencies Other FY23 mix & volume Reach plc | FY23 13
Slide 14: Full year 2023 Use of cash
Summary Financial Strategic review update Full year 2023 Use of cash. Agreed 2019 & 22 £(23)m triennial reviews Judgment time limitation £20m £113m £(60)m provision released Majority relates to Preliminary results | Financial review programmes from Q123 £(5)m Final payment £(19)m Express & Star £(15
Slide 15: Capital allocation
Summary Financial Strategic review update Capital allocation. Cash & balance sheet supports creation of more sustainable business Resilient print profits, sustainable Preliminary results | Financial review cash generation and strong balance sheet Organic Pension Dividends for M&A investment funding
Slide 16: Financial guidance
Summary Financial Strategic review update Financial guidance. 2024 Print: Expect similar trend in circulation volumes Digital: Page view decline impact Q1, positive momentum thereafter Costs: 5-6% reduction in operating costs Depreciation: Expect slightly lower charge to 2023 (2023: £22m) Preliminar
Slide 17: Jim Mullen, Chief Executive Officer
Jim Mullen Chief Executive Officer Preliminary results | Jim Mullen FY Results | 5 March 2024
Slide 18: 2023 Key milestones
Summary Financial Strategic review update 2023 Key milestones. Resolved the long-term uncertainties Milestone HLI Pivotal year Judgment time limitation for the Group reduced future expected Removes uncertainty outflow by £20m Looking ahead for investors, employees and management. Pensions Improves v
Slide 19: Our data-led business model
Summary Financial Strategic review update Our data-led business model. Creating a data-led digital business • Circulation revenue growing from data driven decision • Strong print underpins cash generation • Created sizeable digital asset and Preliminary results | Strategic update diversified our aud
Slide 20: Print: Our foundations
Summary Financial Strategic review update Print: Our foundations. Maintaining this considerable revenue stream and profit generator Resilient revenue dispute falling demand • Carefully planned price increases and promotional activity • Yield management improvements from pagination maintenance • Deve
Slide 21: Large audience offers further opportunities
Summary Financial Strategic review update Large audience offers further opportunities. Further supports our depth of data 6th largest High levels of retention digital asset 36m digital audience 1. Alphabet 6. Reach 72% 2. Meta 7. Apple Preliminary results | Strategic update 12m 3. Amazon 8. eBay 4m
Slide 22: Securing our audience
Summary Financial Strategic review update Securing our audience. The growing importance of first-party data as ad market develops Secure audience strategy Direct relationships Content recommender • Secure audience increasingly active growth +5% YOY • 95% consent to data collection • Reduces exposure
Slide 23: Driving a higher yield mix
Summary Financial Strategic review update Driving a higher yield mix. Growing quality of digital business model +11% Customer Value Strategy (CVS) (3)% • Data and information drives more targeted and effective advertising • Over the LTM RPM increased 23% for data driven More revenues relevant • Prel
Slide 24: Customer value strategy
Summary Financial Strategic review update Customer value strategy. Since inception CVS driving value creation despite the challenging market backdrop • Divergence between the growing data driven RPM and FB declining audience Referral RPM’s Rebased (2019 = 100) variable RPM - Audience / PVs (BRI’s) m
Slide 25: Case study: Strong advertising campaigns
Summary Financial Strategic review update Case study Strong advertising campaigns. How with data we can do more for our partners ‘‘ Our 202 campa was a re It was a from sta 3 Christ ign with a l succes true par mas Reach s. tnership rt to fini Food retailer example: were pa rticularl sh, and we with
Slide 26: Case study: Affiliates, Ecommerce & partnerships
Summary Financial Strategic review update Case study Affiliates, Ecommerce & partnerships. Deliver strong revenue growth, increased 45% year-on-year Affiliates - progress 2023 Ecommerce - Beauty Box • All KPIs increasing with • Data-driven customer-centric brand scale • Customer database nearly 100k
Slide 27: Developing the playbook
Summary Financial Strategic review update Developing the playbook. Continue to transform the business for the digital landscape Mantis Audience Publishers’ toolset. Opportunity as Ways of working initiatives a curator and a publisher Superfans Expanding use of AI Tools to assist editorial New ways t
Slide 28: We serve our customers with brilliant journalism
Summary Financial Strategic review update We serve our customers with brilliant journalism. Delivering the stories that matter October 2023 March 2023 September 2023 Football.London launches The Sunday Mail runs exclusive The Express re-launches their WhatsApp channel to share on SNP’s declining mem
Slide 29: Outlook
Summary Financial Strategic review update Outlook. • Clear strategy which is working • Increased mix of higher quality data-driven digital earnings • Strong position as ad market loses third-party cookies Preliminary results | Strategic update • Momentum returns to digital business • Track record of
Slide 30: Preliminary Results 2023
PRELIMINARY RESULTS 2023.
Slide 31: Appendix
Appendix Preliminary results | Appendix FY Results | 5 March 2024
Slide 32: Definitions
Definitions. Metric Description Adjusted operating profit Operating profit before adjusting items Adjusting Items Items are adjusted on the basis that they distort the underlying performance of the business where they relate to material items that can recur or relate to historical liabilities. Other
Slide 33: Like for like - week
Like for like - 52 week. • The results have been 53 week LFL - 52 week prepared for the 53 weeks Revenue period FY23 period FY23 ending 31 December 2023 and the comparative period has Circulation 1.6% 0.0% been prepared for the 52 week period ending 25 Advertising (11.9)% (13.0)% December 2022 Print
Slide 34: Pensions
Pensions. 2023 2022 Change • The estimated £m £m £m committed pension Fair value of scheme assets 1,733.0 1,710.3 22.7 payments are based on the current funding Present value of scheme liabilities (1,835.6) (1,860.0) 24.4 schedule and are Impact of IFRIC 14 (0.2) (1.2) 1.0 subject to future valuatio
Slide 35: Strong focus on cash
Strong focus on cash. Consistently healthy levels of cash conversion ● Depreciation & amortisation in line Profit to cash FY23 £m FY22 £m with prior year and no change to asset lives Adj. Operating Profit 96.5 106.1 Depreciation & amortisation 21.6 20.2 ● The majority of the reduction in Adj. EBITDA
Slide 36: Group income statement
Group income statement. Operating Pension Adjusted Statutory adjusted items finance results results £m £m charge £m £m 2023 Revenue 568.6 - - 568.6 ● Operating adjusted Operating profit 46.1 50.4 - 96.5 items relate to the items Profit before tax 36.7 50.4 5.9 93.0 charged or credited to Profit afte
Slide 37: Operating adjusted items
Operating adjusted items. 2023 2022 £m £m Provision for Historical Legal issues 20.2 (11.0) Restructuring charges (26.9) (15.5) (Impairment of sublease)/sublet of closed print site (19.4) 16.6 Other property related costs (8.0) (4.6) Pension administration expenses and past service costs (5.5) (14.8
Slide 38: Provisions
Provisions. Share-based Historical Property Restructuring Other Total payments legal issues £m £m £m £m £m £m As at 25 December 2022 (0.9) (9.4) (6.6) (43.0) (3.0) (62.9) Charged to income statement (0.1) (10.3) (27.0) (5.9) (0.8) (44.1) Released to income statement 0.3 0.2 0.1 26.1 0.1 26.8 Reclass